Debenhams suitors get three-day deadline to make firm bids
The fate of Debenhams and the 12,000 jobs of its staff are likely to be decided this week as potential new owners have been given a three-day deadline to make a bid.
Advisors to the struggling retailer have told its suitors – thought to include rival Frasers Group – to make a binding commitment by the end of play on Wednesday or exit the process.
At the same time, those advisors are also considering alternatives to the company coming under new ownership. These include a possible liquidation of the department store chain, as well as selling off parts of it to the hedge fund lenders that ultimately control its destiny.
Any sale wouldn’t include the successful Danish Magasin du Nord operation as this is being sold in a separate process.
Despite having closed a number of shops, Debenhams still has 124 sizeable UK department stores, as well as its webstore. But the oldest department store chain in the UK has been operating under administration since April. Despite that administration having been intended to be a "light touch" one, that hasn't proved to be the case and exiting it has been tougher than the company might have expected earlier in the year.
So who are the potential bidders? We know that Reliance Retail has dropped out of the process, which leave Frasers Group as the other name in the frame. The Times reported on Monday that the House of Fraser owner has offered around £125 million.
That figure is said to be lower than Debenhams’ advisors are looking for, but the newspaper reported that Frasers “is thought to have doubts about the value of stock and a perceived lack of transparency in trading and store closures”.
It's also thought that the Frasers interest would be in shops that the company could convert into its upscale Flannels chain or its Sports Direct operation.
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